May FOMC Meeting: 50bp Interest Rate Hike is Bullish for Markets

Thursday 05 May 2022

Investment Talks

   

May FOMC Meeting: 50bp Interest Rate Hike is Bullish for Markets

May 2022 | Fed Chair Powell stated the need for a 50bp rate hike at the next couple of meetings. Powell's comments on rate hikes suggest the Fed remains comfortable with market pricing at this point, and will be even more data-dependent going forward. While there was little reaction in the financial markets following the release of the FOMC statement, after the press conference, which was not as hawkish as market expectations, there was a strong rally in risk assets.

01 |  On 4 May, the Federal Reserve (Fed) hiked the Fed funds rate by 50bp to 0.75-1.00%, the first back-to-back hike since the second quarter of 2006.

02 | Chair Jerome Powell stated the need for a 50bp rate hike at the next couple of meetings.

03 | After the press conference, which was not as hawkish as market expectations, there was a sharp drop in the two-year Treasury yield and a steepening yield curve. Equity markets rallied sharply.

Inv Talks - May FOMC Meeting: 50bp Interest Rate Hike

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